EXO members Chen, Baekhyun, and Xiumin (hereafter referred to as EXO-CBX) have filed a lawsuit against SM Entertainment executives for fraud.
A representative from INB100, the agency of EXO-CBX, stated to Maeil Business Star Today on the 26th of June, “Yesterday, we filed a lawsuit against SM’s CEO Lee Seong-su and co-CEO Tak Young-joon at Seoul Seongdong Police Station for fraud under the Act on Special Cases Concerning the Punishment of Economic Crimes.”
According to EXO-CBX, SM promised to apply a commission rate of 5.5% for the distribution of albums and digital music by Kakao, but failed to fulfill this promise. They also claimed that SM took advantage of EXO-CBX’s individual activities to capture 10% of their sales revenue as royalty.
The conflict between EXO-CBX and SM dates back to about a year ago. When EXO-CBX notified SM of the termination of their exclusive contracts due to issues such as non-disclosure of settlement data in June last year, SM claimed that external forces had approached the artists with unfair intentions.
The conflict seemed to be resolved when SM and EXO-CBX issued a joint statement stating, “There were misunderstandings about the involvement of third-party external forces,” and announced plans to promote EXO’s activities more vigorously and continuously through discussions and modifications of the contract.
EXO-CBX established the independent label INB100 in January this year, and agreed to continue EXO’s activities under SM, while individual and team activities of EXO-CBX would be carried out under the independent label INB100.
However, the conflict reignited when EXO-CBX held a press conference on the 10th of this month, exposing that SM did not keep its promise regarding the commission rate for album and digital music distribution, and only demanded 10% royalty for individual activities revenue.
SEE ALSO: The Timeline Of EXO-CBX and SM Entertainment Legal Battle
In response, SM stated, “Our exclusive contract with EXO-CBX is still valid,” and “we allowed individual activities through personal corporations, and EXO-CBX agreed to pay 10% of their individual corporation sales according to the agreement,” emphasizing that the contract should be fulfilled.
Source: (A)
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